The Salina Journal from Salina, Kansas · Page 3

THE SALINA JOURNAL GREAT PLAINS MONDAY, APRIL 9, 2001 A3 T BY GEORGE The Kansas economy is not a closed system Cutting state taxes is no guarantee of a healtliy state economy ; Faced with a stunning shortfall in revenues, members of the Kansas Legislature are looking for things to cut from the $4.66 biUion general fund budget they approved only last week. The first thing that deserves to wind up in the garbage is the notion that Kansas can boost its economy by cutting its taxes. Kansas cut taxes, and cut taxes, and cut taxes again. A strong national economy meant that lower tax rates did not mean lower tax payments. No, the state was raking in more money every year, despite the cut in income tax rates and the slashing of the state property tax levy for public education. That made it possible to spend more money on lots of necessary things, • KANSAS BUDGET most notably highways and the reorganization of the state's university system, without committing the politically risky move of boosting tax rates. Lawmakers got to brag about improved public services and lower taxes. Talk about having your cake and eating it, too. One of the arguments for cutting taxes, in Topeka as in Washington, is that it will stimulate the economy which, in turn, wiU boost tax receipts. There is some logic to the idea that people who spend less on taxes will spend more on, well, everything else, especially in a nation that is as lousy at saving as this one is. But the theory of Kansas tax policy guiding the economy of Kansas contains the same fatal flaw found in the anti-science theory that the laws of thermodynamics make evolution impossible. Both assume a closed system, with no energy flowing in or out. As lovely as Kansas is, as superior as its land, its people and its sunsets may be, it is not a closed system. Our economy moves in response, not to the decisions made in Topeka, ^ but the decisions made on WaU Street, at the Federal Reserve Bank and in the pits of the Chicago Board of Trade. If we are not building as many airplanes as we were five years ago, it is because of the feuds and mergers in the airline industry, not the final shape of the Legislature's omnibus budget bill. If wheat is still selling for an amount that doesn't cover the cost of production, that's because of the near-monopolistic buying power of a few grain GEORGE B. PYLE The Salina Journal processors, not the difference between a 4.9 and a 5.1 percent Kansas sales-tax rate. But our leaders are moved to pretend that our tax rates are the key to our economic future. They will pretend that because they want us to think they are really important, and because they know, or they think, that even though tax policy is a minor factor in the economy, it's the only one they have any control over But if it is right to make tax policy on the basis of its impact on the economy and not simply on the state's need for income, then it is fair to make other kinds of policy on the theory that state government has a role to play in boosting the state's economy And at least as important as tax rates are things such as graduation rates, bankruptcy rates, crime rates, infant mortality rates, suicide rates, homelessness rates and the amount of time people spend waiting for home health care, mental health services and foster home placement. All those quality-of-life issues won't be solved simply by huge hikes in state spending. But they sure won't be addressed by politically popular tax cuts, either Government's role in the economy — local, state and national — is the quality of basic services it provides, from highways to schools, from emergency services to crime prevention, from high-tech infrastructure to enforcement of fair marketing laws for our farmers. Fulfilling those responsibilities is the way our elected leaders can claim, and actually earn, some credit for a Kansas economy that will do us all proud. • Journal columnist George B. Pyle can be reached at 823-6464, Ext. 101, or by e-mail at gpyle@saljownal.com. Rags to riches to. State goes from booms to busts GENERAL FUND By JOHN HANNA The Associated Press TOPEKA — Gov. Bill Graves is facing a big budget problem, a gap of more than $185 million between his and legislators' AlHllySlS proposed spending and what the state expects to collect over the next 15 rnonths. Graves had to deal with a similar problem after he took office in 1995. His predecessor, Joan Finney, confronted the same kind of crisis. So did her predecessors, Mike Hayden and John Carlin. State government operates in a cycle of crisis, moving from a few boom years to a few bust ones with an almost reassuring regularity The political lesson is as basic as the fable of the thrifty ant and the foolish grasshopper: Good times caU for some stockpiling of resources for the bad times. But that lesson keeps getting ignored by governors and legislators because of the most basic traits of human nature — the desire to please politically. "1 think we're looking for instant gratification when we real- 7 think we're looking for instant gratification when we really ought to be saving for a rainy day" Sen. Anthony Hensley D-Topeka ly ought to be saving for a rainy day," acknowledged Senate Minority Leader Anthony Hensley D-Topeka. This year's problems stand in sharp contrast to the same week in April 1998. Graves had proposed a $171 million package of tax cuts — then expended it to $252 mUlion when estimates of state revenue were revised upward. It was an election year, and legislators passed the governor's plan quickly But they did so over ,a cautionary note from Dave Kerr, now Senate president and then chairman of its Ways and Means Committee. "It presents risks we don't need to take," Kerr, R- Hutchinson, said at the time. YEAR REVENUES SPENDING DIFF 1978 $854.6 $840.9 $13.7 1979 $1,006.8 $966.7 $40.1 1980 $1,097.8 $1,112.0 ($14.2) 1981 $1,226.5 $1,259.0 ($32.5) 1982 $1,273.0 $1,333.6 ($60.6) 1983 $1,363.6 $1,406.0 ($42.4) 1984 $1,546.9 $1,503.3 $43.6 1985 $1,658.5 $1,634.5 $24.0 1986 $1,641.4 $1,743.0' ($101.6) 1987 $1,778.5 $1,726.6 $51.9 1988 $2,113.1 $1,886.1 $227.0 1989 $2,228.3 $2,159.9 $68.4 1990 $2,300.5 $2,400.3 (.$99.8) 1991 $2,382.3 $2,495.4 ($113.1) 1992 $2,465.8 $2,491.3 ($25.5) 1993 ,$2,932.0 $2,690.4 " $241.6 1994 $3,175.7 $3,111.0 $64,7 1995 $3,218.8 $3,309.8 ($91.0) 1996 $3,448.3 $3,439.2 $9.1 1997 $3,683.8 $3,588.1 $95.7 1998 $4,023.7 $3,799.1 $224.6 1999 $3,978.4 $4,196.2 ($217.8) 2000 $4,203.1 $4,367.6 ($164.5) 2001 $4,410.6 $4,433.1 ($22.5) 2002 $4,484.4 $4,663.0 ($178.6) si' ''-^ti' , SUPERIOR ROOFING is now teamed up with Sales Roofing and Supply. Workers compensation, bonded and insured. Residential Specialists. When you call Superior Roofing Co., you have 50 years of combined experience working for you. You want quality at a fair price? Call Superior Roofing. We do all residential roofing and 2% commercial. Call 827-1217 for your free estimate. Superior Roofing, member of the Better Business Bureau and the Salina Area Chamber of Commerce. I I BBB —17- HEMBED SOUTHEAST CENTBAL A WESTERN KANSAS ADVERTISEMENT &HTED: 25 Foople Willi Btariig lois! • Years are fiscal years. Revenue figures for fiscal years 2001 and 2002 are estimates: • The Kansas Constitution prohibits deficit spending by state government, but the general fund begins each year with cash balances. When expenditures are greater than revenues, those balances dwindle. • The general fund holds most of the state's tax revenue and is the largest source of money for its government programs. (Source: State Budget Division.) • EDUCATION Revenue shortfall subdues debate Senators go back to school to find ways to patch budget hole By JOHN MILBURN The Associated Press TOPEKA — News of a $185 million hole in the state's budget caused the Statehouse school finance debate to shift like winds on the Kansas prairie. Hours after sending a two- year, $263 million plan for improving elementary and secondary education back to committee, senators learned that the state's revenue outlook for the next 15 months is worse than bleak. As a result, the school finance debate returned to where it started this session, with legislators home for the next two weeks, listening to constituents and contemplating raising taxes to improve education. Legislators began their annual spring break Friday night, but the time away from the Statehouse will be anything but a break for members of the Senate Education Committee. Senators will be looking for a way to hold on to the $68 million Gov Bill Graves recommended in January and perhaps find a few dollars more. "The needs haven't changed at all," said Sen. Christine Downey, D-Newton. "I'm not willing to T MUNICIPAL BAND come down much." What has changed is that education is not the only dog in the revenue fight. Downey is not willing to concede that something can't be done for education, citing the support of the Kansas Chamber of Commerce and Industry, among other groups, who see education spending as investment in the state economy In the wake of last week's debate, the committee pared back its package and its price tag, consulting with Graves on what he sees as key elements of a plan he supports. Graves has proposed a one- year, $112 million plan that would have raised sales and motor fuels taxes. Combined with his original recommendations. Graves would put $178 million of new money in education, raising the base state aid per pupil to $3,930 from $3,820. The Senate education plan would have raised taxes on sales, liquor, tobacco and soft drinks — to increase funding for teacher salaries and raise the base aid by $240 over two years. However, in a final meeting Friday before leaving for home, members of the education group took several ideas off the table, including the proposed tax on soft drinks and any plan to impose additional state or local property taxes. "Property taxes just passed the House," said Senate Majority Leader Lana Oleen, R-Manhattan. "It's caUed the LOB." The House sent the Senate a biU Friday that would increase local option budgets, LOBs, to 30 percent from 25 percent of districts' state aid, with the extra amount subject to a public vote. LOBs are financed with local property tax levies. House Republicans argue the bill gives local districts more control in funding for salaries and curriculum. Democrats say it is a tax increase, just at the local level, and it wUl amplify the inequities between rich and poor districts. House Speaker Kent Glasscock has maintained an aversion to raising taxes for education all session. The chamber has repeatedly sent messages to the Senate in the form of the LOB bill and a measure that would lovver the statewide property tax for education. Earlier this session, the House approved "Tools for Tots," a two- year $29.4 million program with the goal of having 90 percent of third-graders proficient in reading, writing and math by 2010. Glasscock admits the bipartisan plan faces uncertainty, given state finances. "We probably don't have the money to buy the pencUs for the K-3 plan right now," he said. 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Central Wichita Topeka Ark City Independence Overland Park 1216 S Santa Fe 2534 N Main 8404 W 13th 303 S Hydraulic 5219SW7tH 117 W 5th Ave now Main 7220 W. 80th St. 785/823-5110 620/665-8835 316/721-4138 316/269-9311 785/273-7422 620/441/9955 620/331-6511 913/381-0860 Call now to reserve your appointment. Our friendly staff of licensed hearing aid consultants are prepared to answer all your questions. Call today!! Or visit our website at www.earcare.org City band tunes up for first performance By The Salina Journal Salina Municipal Band rehearsals will begin early this year so the band will be ready to perform at the Kansas State University-Salina graduation. All players from high school age and older are invited to join. No audition is required. The first rehearsal will be at 7:30 p.m. April 17 on the third floor of Memorial Hall, Ninth and Ash streets. The band will begin work on the summer season and songs for the K- State-Salina graduation May 5 at the Kansas Highway Patrol Training Center. Conductor Eric Stein selects marches, Broadway tunes and 4 popular songs for the band, said Jim Brown, general manager and trombone player. The season begins with the Smoky Hill River Festival then moves to Weekly 8 p.m. Tuesday performances in Oakdale Park. The season ends with the Tri- Rivers Fair and Rodeo in August. Regular season rehearsals will be at 7:30 p.m. Mondays. The free concerts draw from 400 to 500 people. Brown said. The city-funded band began in 1884 as a military band. Brown said. It has been going strong in recent years with 45 to 50 players most seasons. The largest group was in 1999 with 65 members. The city pays members $8 for rehearsals and $6 for concerts. Brown hopes more people will come to hear the band this summer. "It's their tax money — well a small amount -— that pays for these concerts," Brown said. 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